Steve LeClair: Hi, Vivek, this is Steve. So I’d say that we’ve €“ it’s difficult to quantify exactly what we’ve seen so far in terms of market share gains, but what we have experienced so far is that certainly, with a lot of our smaller competitors that have been limited with access to product, we’ve been able to get preferential access along those lines, given our size and scale, and that’s allowed us to gain some good amounts of share, certainly against a lot of the smaller competitors out there and the regional folks. You talk a little bit about what we experienced through the downturn in the last recession? Very different dynamic back then as I shared during one of the earlier questions and our business was positioned much differently.
At that time, we were about 50% residential. Now you look at it, we’re about almost 40% municipal, 40% non-res and just over 20% residential. So our exposure was very different. We built a lot more sustainable opportunities and product categories that help to enhance that municipal sales and the non-residential sales. So our business is just much more diversified than we were back then. Certainly, through that downturn, things got very competitive as €“ particularly in the residential area. But that was a different environment than €“ that was €“ it took a while for those lots that were way over developed to be replenished once housing started to get back on its feet again through 2012 and the 2016-’18 in that time frame. Right now, what we’re seeing is a real shortage in lots.
So even as housing starts to build out and as we started to see a little bit of a pause, the medium- and long-term demand for lot development is still going to remain strong, we believe, and that creates a little different environment than what we’ve seen in that past in the deep recession that happened 12 years ago, 13 years ago.
Vivek Srivastava: Thank you. That’s super helpful. Maybe my next question more focused on the strategic inventory investment and mix benefit this quarter. Any quantification you can provide on those two buckets? And then maybe more specifically on the mix side, what really was that mix driver? And how should we think about mix aspect of your business going forward, maybe next quarter in a bit more medium-term?
Mark Witkowski: Yes. I’d say, Vivek, on the inventory investments that we’ve made, I’d probably bracket that somewhere in the $300 million to $400 million of inventory where we’ve bought ahead of a lot of these price increases more recently on some of these more non-commodity-type products that will work to continue to optimize as we get through the fourth quarter and into 2023. In terms of the mix benefit, I’d probably give you €“ as you look at those gross margins sequentially from Q2 to Q3, we picked up about 60 basis points. I’d say a lot of that came from the mix benefit that we saw in the quarter. As we get through the fourth quarter right back into 2023, we will see that mix probably return back to more normal, which is part of that kind of 100 to 150 basis point reset that we expect to happen at some point.
Vivek Srivastava: Perfect. Thank you.
Mark Witkowski: Alright. Thanks.
Operator: Thank you, Joe. We have our next question, comes from Patrick Baumann from JPMorgan. Patrick, your line is now open.
Patrick Baumann: Hi, thank you. Good morning. Nice to see the free cash flow in the quarter was positive, but since you’ve taken down the conversion guide throughout the year, I just wanted to see if you could update us on what you see as the normalized free cash conversion level for the company? And then how we should think about that into next year in light of what you’re hoping to do from an inventory perspective? And maybe if you could give some color on how much inventory you think dollar-wise could come out to normalize things? I think you said $300 million to $400 million in response to the prior question is that, that number that you’re talking about or is it something else?
